TAOISEACH Enda Kenny witnessed the new strained relations between the EU's heavy-hitters first-hand last night as France and Germany clashed over eurozone countries clubbing together to borrow money.

As the euro crisis over Greece continues to escalate, Finance Minister Michael Noonan's officials denied that they had been told to draw up emergency plans to deal with a Greek exit from the single currency.

But EU leaders continue to bicker over the solution to the problems in the euro and supports for struggling countries, including Ireland.

German Chancellor Angela Merkel is believed to have stuck to her guns on the contentious issue of the joint issuing of bond, known as eurobonds, which the new French President Francois Hollande is pushing heavily.

Ms Merkel resisted the pressure to shift her policy away from focusing solely on balancing budgets and appears to have been backed in this by the Netherlands and Sweden.

For the first time in more than two years of debt-crisis meetings, the leaders of France and Germany did not meet beforehand to agree positions, marking a significant shift in the Franco-German axis which has traditionally driven European policymaking.

Previously, Ms Merkel would form a powerful united front with the former French president, Nicolas Sarkozy.

Ahead of the meeting of EU leaders to discuss ways to promote jobs and growth across the eurozone, Mr Kenny said he expected the new EU bailout fund, the European Central Bank's role and extra funding from the European Investment Bank to be among the items up for discussion.

Eurobonds

"I see this as an opportunity not just to have the question of good budgetary rules examined but to ally that a very strong growth agenda and that covers a very broad spectrum," he said.

But Mr Kenny also reiterated the Government's opposition to a new tax on banking.

"We do not support that where there would be a disadvantage to our country," he said.

Tanaiste Eamon Gilmore also welcomed eurobonds being under discussion yesterday.

He said: "Ireland has already said that we are in favour of eurobonds, for a wider role for the European Investment Bank, for whatever measures can be developed that will create jobs and promote more investment."

Meanwhile, the Department of Finance denied reports that every member of the euro had been told to draw up contingency plans in case Greece leaves the single currency.

The Reuters news agency reported that the instruction had been agreed on Monday by a conference call of the Eurogroup Working Group (EWG) -- the experts who work on behalf of the eurozone's finance ministers. But Mr Noonan's officials said no such discussion took place, nor was any such policy adopted.

A spokesman said: "The EWG has on Monday considered in a conference call the state of play in financial markets and in Greece, as it usually does. There has been no agreement to develop national contingency plans nor any discussion of an exit of Greece from the euro area."